Rolling RSU gains into tax-deferred accounts?

[Anonymous]

I'm going to be selling a relatively large amount of company stock soon. The sale will push me into the top tax bracket for both income and capital gains (long term).

We intend to just reinvest the money and use it in retirement which is at least 10 years away. Is there a way to roll it into a retirement account to avoid capital gains? I don't want to avoid paying my fair share, but I do want to know all my options.

[Anonymous]

No

[Anonymous]

Seems like you do want to avoid paying your fair share

[Anonymous]

Anonymous wrote:Seems like you do want to avoid paying your fair share

No. I'm not trying to cheat, I'm just trying to understand the rules. Thanks, though.

[Anonymous]

Anonymous wrote:I'm going to be selling a relatively large amount of company stock soon. The sale will push me into the top tax bracket for both income and capital gains (long term).

We intend to just reinvest the money and use it in retirement which is at least 10 years away. Is there a way to roll it into a retirement account to avoid capital gains? I don't want to avoid paying my fair share, but I do want to know all my options.

No. You could consider a couple of things to reduce tax impact:
- Spread the sale over many years
- If your fear is the stock will tank and you are just trying to rebalance, hedge the price by buying Puts, while you rebalance over a few years. If you/spouse are not allowed to do that based on company rules, ask a parent/sibling to do that. You can figure out how to make them whole.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm going to be selling a relatively large amount of company stock soon. The sale will push me into the top tax bracket for both income and capital gains (long term).

We intend to just reinvest the money and use it in retirement which is at least 10 years away. Is there a way to roll it into a retirement account to avoid capital gains? I don't want to avoid paying my fair share, but I do want to know all my options.

No. You could consider a couple of things to reduce tax impact:
- Spread the sale over many years
- If your fear is the stock will tank and you are just trying to rebalance, hedge the price by buying Puts, while you rebalance over a few years. If you/spouse are not allowed to do that based on company rules, ask a parent/sibling to do that. You can figure out how to make them whole.

Interesting. Thanks for the input.

[Anonymous]

You can’t roll the money directly into a retirement account and avoid capital gains, but if you have space in retirement accounts you could just contribute more to it from your salary.

[Anonymous]

Anonymous wrote:You can’t roll the money directly into a retirement account and avoid capital gains, but if you have space in retirement accounts you could just contribute more to it from your salary.

But it would seem odd that someone with income in the top bracket isn’t already at the limit for retirement accounts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can’t roll the money directly into a retirement account and avoid capital gains, but if you have space in retirement accounts you could just contribute more to it from your salary.

But it would seem odd that someone with income in the top bracket isn’t already at the limit for retirement accounts.

You're right. Our retirement accounts are maxed out, though we don't do a backdoor Roth yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can’t roll the money directly into a retirement account and avoid capital gains, but if you have space in retirement accounts you could just contribute more to it from your salary.

But it would seem odd that someone with income in the top bracket isn’t already at the limit for retirement accounts.

You're right. Our retirement accounts are maxed out, though we don't do a backdoor Roth yet.

So how were you planning to do this even if it were allowed?

[Anonymous]

How do you not have a financial advisor instead of asking random interwebs people?

[Anonymous]

Anonymous wrote:How do you not have a financial advisor instead of asking random interwebs people?

I see this (and similar q about lawyers) a lot. Most of the time, folks have one or two questions that can be answered through research and crowd sourcing. No point paying a professional.

[Anonymous]

To minimize the tax impact - Depending on the value (eg I wouldn’t do this for $1-5M but $5M+ yes) - you may want to look into this: https://www.investopedia.com/articles/07/oil-tax-break.asp

[Anonymous]

Anonymous wrote:

So how were you planning to do this even if it were allowed?

I don't know. Thus why I'm asking.

Anonymous wrote:How do you not have a financial advisor instead of asking random interwebs people?

I have an accountant, but that's not the same. This kind of income is new to us, so there was no need for outside help or creative ideas previously.

[Anonymous]

Anonymous wrote:To minimize the tax impact - Depending on the value (eg I wouldn’t do this for $1-5M but $5M+ yes) - you may want to look into this: https://www.investopedia.com/articles/07/oil-tax-break.asp

Interesting - thanks. We're not yet in that later category, but I'll read this. Appreciate it.